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If the stock price is too low, then the company becomes a target for a hostile takeover. As an IBM executive, you don't want some PE firm becoming majority own
by scribu 6y ago
If the stock price is too low, then the company becomes a target for a hostile takeover.
As an IBM executive, you don't want some PE firm becoming majority owner and replacing you with someone else.
- mettamage 6y agoI don't know anything about IBM in this regard. Isn't that situation dependant? Or is such a thing common enough to say that this usually is the case? I.e. +50% shares need to be outstanding (assuming nothing is owned by the hostile PE firm).
- scribu 6y agoYou're right, there need to be enough outstanding shares for a hostile takeover to take place. But more relevantly to IBM's case, the top shareholders are also the top executives. [1] So, in this case, the stock price going down affects them direcly. [1] https://www.investopedia.com/articles/insights/052216/top-5-ibm-shareholders-ibm.asp https://www.investopedia.com/articles/insights/052216/top-5-...
- Tehdasi 6y agoTop individual shareholders. Their holdings are tiny, the highest one holds ~10m compared to a market cap of ~100B.